EcoAct, the international climate and sustainability consultancy, has today published its climate change business leaderboard for the UK, ranking FTSE 100 companies on climate related sustainability reporting and announcing the top 20 for outstanding efforts.
Looking at the various sectors and specific FTSE 100 companies that topped the ranking, two of the UK’s largest retailers – Marks & Spencer and Tesco – claimed 2nd and 4th positions respectively. Within the overall rankings of the entire FTSE 100, EcoAct reveals that retailers Kingfisher, Burberry, Sainsbury, Next and Morrison also featured in the top 50%. Burberry has also been commended for the biggest improvement in scoring, moving up 42 places since last year to 23rd position.
The number of consumer-focused companies, including retail, FMCG and food and beverage, in the top 20 indicates a growing realisation by these industry sectors of increased climate awareness among the general public and the mounting demand for action. Pressure from the investor community is increasingly a driver for companies to act in order to safeguard future interests from the long-term impacts of climate change.
However, overall the report makes for sobering reading with a clear message that UK businesses are not going far enough in implementing critical steps to limit carbon emissions.
With the Intergovernmental Panel on Climate Change (IPCC) reporting a less than a 12-year window to limit global warming to 1.5°C, and the UK government’s recent net zero emissions law requiring the country to bring all greenhouse gas emissions to net zero by 2050, it is critical that the commercial sector urgently transforms their operations.
EcoAct’s report discloses that while 81% of the FTSE 100 companies have some sort of emissions reduction target, 85% currently do not have a sufficient emissions reduction strategy in place to limit global warming to safe levels. The report also reveals that only 8% of FTSE 100 companies have attained carbon neutrality, with only a further 10% making the commitment to do so, highlighting the enormous performance gap needed to be filled in a short space of time.
However, 78% of general retailers and supermarkets have set or committed to set a science-based emissions reduction target, which demonstrates strong ambition on tackling emissions within the sector.
“What has become crystal clear over the last year is that the climate emergency is no longer a distant concept,” said Stuart Lemmon, managing director, EcoAct. “In our 9th year of examining climate performance of the UK’s largest companies, while we have seen progress, change is simply not happening fast enough. It is now imperative that companies urgently step up to their responsibilities to drastically reduce carbon output.”
Scores for the FTSE 100 companies – which make up the rankings in the report – range from 1% at their lowest to 87% at their best, demonstrating a highly disparate mix of sustainability performance and indicating that adequate sustainability reporting is still not a given in large companies.
Undertaking similar sustainability research across the CAC 40, IBEX 35 and the DOW 30, EcoAct’s FTSE report suggests that the UK is lagging behind some other economies – for example in alignment or commitment to the Task Force on Climate-related Financial Disclosures (TCFD) – and advising that there is much work to do for the UK to meet its ambitious new role of “international leader” on climate action.
Also of note in the report was BT’s ranking at number 3 and the high performance of not one, but four energy, water and utility companies, including National Grid, Centrica, SSE and United Utilities at positions 8, 9, 12 and 17 respectively. Additionally, the first fossil fuels company entered the top 10, with Royal Dutch Shell placed at joint 9th position, having moved from 31st position only a year ago. Banks also ranked as performing well, with RBS, HSBC and Barclays taking 15th, 16th and 19th positions respectively.
In addressing an area that has been the focus of some recent controversy, EcoAct’s report also shows that the number of FTSE companies purchasing carbon offsets has doubled – from 12% to 24% in the past year – indicating a growing awareness of the need to reduce carbon footprints in absence of 100% carbon neutral solutions.
“Carbon offsetting absolutely has a place as part of a carefully considered carbon emissions reduction plan where a company is unable to reduce certain operational emissions,” said Lemmon. “As an internationally-recognised market mechanism to help achieve carbon neutrality, carbon offsetting can play a significant role when not all emissions can be reduced in the short-term. Providing they are well-conceived and rigorously verified, offsetting projects can help deliver the promised carbon reductions whilst improving lives and supporting sustainable development.”